Sir, - Tánaiste Simon Harris’s hoped-for new savings scheme has generated several suggestions for more tax breaks.
It might be more useful to start by asking questions about relevant issues. For example, how would a new scheme relate to others already in place, such as the auto-enrolment pension scheme?
Secondly, if the aim is to encourage people to invest in something more attractive than bank deposits, we should look at the existence of substantial disincentives to invest in assets, such as exchange-traded funds. Our draconian deemed-disposal rules are quite off-putting in this regard.
The reform of capital gains tax (CGT) is also a relevant matter. The CGT rate should be closer to the top income-tax rate, but with the restoration of inflation-indexing. At present, CGT on long-term gains threatens to be more of a tax on capital rather than a tax on gains.
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I am disappointed that almost no financial commentary has focused on the wider issues. – Yours, etc,
JOHN SHEEHAN,
Rathfarnham,
Dublin.
